Health financing for universal coverage

How is a health system to be funded?

Revenue collection - more money for health

The availability of funds for health is a fundamental question for all countries.

Every country faces funding challenges

For poorer countries, the challenge is to increase the funding available for health so that they are able to provide and make accessible the needed set of health services of sufficient quality - namely treatment, prevention, promotion and rehabilitation.

Currently many countries are still under the levels of health expenditure that have been defined as critical minimums for providing at least a minimal set of health services. For richer countries, the challenge is to protect the current levels of health expenditure while responding to the challenge of ageing populations (with implications for both revenues and costs) and cost pressure from technological advances (a challenge facing poorer countries as well).

Many options to increase funding

Every country could raise additional domestic funds for health or diversify their funding sources if they wished to. Options include governments giving higher priority to health in their budget allocations, collecting taxes more efficiently, including compulsory insurance contributions, and raising additional funds through various types of innovative funding mechanisms. Taxes on harmful products such as tobacco and alcohol are one such option. They reduce consumption thereby improving health, and increase the resources governments can spend on health.

A ministry of health cannot, on its own, implement measures to increase funding, but it has the responsibility to try and influence the rest of government. This calls for more and better dialogue between the health policy makers and those that control public spending - the ministries of finance and the wider political actors and institutions (such as the parliament and the heads of state).

International funds for health are vital

Even with substantial increases in domestic health expenditure, increased external financial flows will be necessary for many of the low-income countries for a considerable period of time. Development partners can raise more funds to channel to poorer countries in innovative ways, but they should also focus on providing more predictable, harmonized and long-term aid flows.

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